Final Inspection

Memo to Romney-Ryan: It’s the Auto Economy, Stupid

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Unlike most industrialized nations, the U.S. ignores the importance of the auto industry to its economic future.

The gloom and doom that has hovered over Michigan like a dense fog for the past four years is starting to lift.

Unemployment, more than 14% in the summer of 2009, has plummeted to about 8.5%. While that’s still high, it’s a bit misleading because employers are struggling to find qualified, skilled workers.

Home sales are up 10% through June compared with the nation's 5% growth rate, according to the National Association of Realtors and the state's retail sales surged in April and May, while the national figure fell 0.2%. Even plastic surgeons are seeing a surge in pricey cosmetic surgery, the Detroit News reports.

Michigan now is a bright spot in the U.S. economy because of one thing: auto manufacturing. And Michigan is not the only state benefitting.

Mississippi is getting a big economic boost from Toyota’s new Corolla plant in Blue Springs.

Tennessee is seeing a bump from Volkswagen’s new plant in Chattanooga. GM is expanding in Tennessee once again, and so is Nissan, already a huge employer in the state. Honda’s huge facilities in Ohio are pumping up that state’s economy; BMW is giving a shot in the arm to South Carolina. Mercedes and Hyundai are boosting production in Alabama. Kia is furiously churning out vehicles in Georgia.

The list goes on and on. While the overall U.S. economy is growing at a pace slower than anyone was hoping for, the auto industry is looking at a double-digit expansion.

According to Bloomberg, the U.S. auto industry’s comeback contributed fully half of the 2.2% national economic growth in the first quarter. And auto sales still remain on target to soar well above 14 million vehicles in 2012, the best pace in at least four years. 

The auto industry is doing what it always does, in every country it is in: Creating hundreds of thousands of good-paying jobs.

Instead of blathering about tax cuts and creating jobs by helping small businesses and technology companies such as Facebook, our political leaders should be focusing instead on doing every thing they can to keep the revitalization of America’s auto industry moving.

But in my 30 years of as an automotive journalist, this has never happened.

In the 1980s, the experts told us auto manufacturing didn’t matter because the U.S. was becoming a “service economy.” We were all going to become a financial analyst or flip burgers for a living. Honda and Nissan ignored this advice and built giant factories in Tennessee and Ohio, employing thousands.

In the 1990s, the experts told us manufacturing didn’t matter because the Internet economy and dotcom companies such as America Online and WorldCom were the future. There was no need for Americans to get their hands dirty making things. Luckily for us, Toyota, Mercedes and BMW didn’t see it that way. They started building big auto plants here.

And, just a few months ago, the experts were telling us Facebook was the most valuable company in the world.

Facebook employs 3,500 people worldwide, less than one auto assembly plant. Five or 10 years from now, will it even exist?

According to the Alliance of Automobile Manufacturers, the industry’s trade group, automakers directly employ 1.7 million people to design, engineer, manufacture and supply parts for new motor vehicles. Indirect and community support jobs bring the total to 3.1 million jobs nationwide. Outside suppliers support another 3.3 million workers, and dealers 1.5 million more.

And auto makers create highly engineered products whose useful life now is nearing 20 years. The average age of a vehicle on today’s roads is about 11 years.

Meanwhile, Facebook’s main goal appears to be wasting more and more of everyone’s time.

There is a reason why China made automotive one of its key pillars of growth. There is a reason, why Brazil, Russia and India are nurturing and trying to grow their automotive industries. There is a reason Germany, France and Italy are fighting desperately to save theirs.  

Automotive manufacturing is important. It helps nations grow by generating huge revenue and tax streams that lead to further development and expertise in crucial areas such as engineering and science.

And yet, most Americans and most U.S. leaders treat auto manufacturing like it’s just any other business, and something they would rather not be involved with.

Every day, as I look around and see the auto industry thriving, and the value of my house growing, I say a little thank you to the handful of politicians, judges and business leaders who understand and appreciate the value of a strong American automotive industry. And I say it in English, Japanese, Italian, German and Korean.

dwinter@wardsauto.com

 

Discuss this Blog Entry 4

on Aug 15, 2012

Speaking of stupid, Drew,

It's quite likely that Mitt Romney knows the automotive industry considerably better than you. Did your father run a car company? Mitts' dad did.

It' the UNIONS, stupid!

on Aug 15, 2012

I beg to differ. I've been covering the auto industry as a professional journalist for more than thirty years. Evaluating someone's expertise based on what their father did 40 years ago is pretty illogical don't you think?

on Aug 15, 2012

It seems you have been in Obama's pocket in many of the editorials you have been writing and I have to disagree with your ideals completely. I thought this was the Auto industry, not the liberal left's Bully Pulpit.

on Aug 16, 2012

My editorial opinions are based on facts, logic and deductive reasoning, not political dogma. A strong national auto industry is good for all Americans. It should not be a partisan issue. George W. Bush certainly understood this. His advisors told him there would be 21% unemployment in the midwest and the auto supply base would collapse if he did not provide GM and Chrysler with crucial bridge loans. So he listened to his advisors and laid the groundwork for the Obama rescue. It was a smart, courageous move on GWB's part and it worked. The U.S. auto industry is driving the U.S. economic recovery because a bipartisan effort saved it when it needed saving.

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